NEW YORK (Creditnet) -- If you use credit cards, you should be accustomed to receiving balance transfer checks in the mail all the time. It's no secret that credit issuers love tempting their customers with quick money!
I get these types of checks from my credit card companies on a weekly basis, but they promptly end up in a shredder along with the rest of the junk mail that overflows from my tiny mailbox. In fact, I rarely even take the time to look at them anymore.
If you ever find yourself tempted to use a balance transfer check because an attractive 0% intro APR or some other feature sparks your interest, here are two major reasons why that check should quickly find its way to being fed into your shredder.
1. You can score a better 0% interest promotion elsewhere
Credit card issuers typically treat new customers much better than existing customers. This means that you should be able to find numerous credit card offers on the market with longer 0% interest promotions than what your credit issuer is willing to offer you in the form of a balance transfer check. If you're going to take advantage of a no interest promotion, you might as well take advantage of the longest one possible.
Balance transfer fees generally run from 3% to 5% when you use a balance transfer check, and that can certainly add up fast if you're writing a check for a large sum. However, if you have a decent credit score and are willing to add a new credit card to your wallet, you can actually avoid balance transfer fees altogether. For example, Slate from JPMorgan Chase (JPM) currently waives the balance transfer fee when new cardholders transfer balances within 60 days of receiving the card. Furthermore, the Slate from Chase is a no annual fee card that offers 0% interest on purchases and balance transfers for 15 months, which really makes this the ideal credit card for anyone with great credit who is interested in initiating a balance transfer. The bottom line is that the balance transfer check you receive in the mail probably isn't the best balance transfer option available to you. Consider applying for a new credit card instead, and you could enjoy decreased transaction fees and longer 0% interest promotional periods. To illustrate how this works, let's take a close look at three scenarios to see just how much more you could save by transferring a $10,000 balance from a high-interest credit card to the Slate from Chase card with no balance transfer fee.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
24/7 market commentary from Jim Cramer and 20+ veteran Wall Street gurus. Get access to the latest trading ideas on stocks, options, and ETFs as well as a real-time forum to see the pros exchanging their investment ideas.
- Jim Cramer + 20 Wall Street pros
- Intraday commentary & news
- Real-time trading forum
- Actionable trade ideas
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV